Seattle implemented a Building Emissions Standard: now what?
Photo by Sean Pollock on Unsplash
If you own a building in the City of Seattle, over 20,000 square feet, that building is now subject to Seattle’s Building Emissions Performance Standard (BEPS), which was signed into law by the Mayor on December 13, 2023. General information about BEPS is available via the City’s dedicated webpage.
So, what should you do?
New regulations can sometimes feel overwhelming. Here are four key steps you can take to prepare for implementation.
See the bigger picture. Yes, there will be some costs associated with compliance. That said, climate change is already making the cost of doing business far more expensive - from increased insurance premiums to shifting market demands to supply chain disruption and the impacts of more frequent and severe storms, heat and wildfires. A livable climate is our shared responsibility. And given the significant and broad ranging impacts of the real estate sector on climate emissions (learn more here), we have work to do - so let’s be partners in this work.
Overlap with Clean Buildings Act. Steps have been taken to create alignment between the Clean Buildings Act (HB 1257, Washington state’s performance standard) and BEPS. The City’s Director’s Report provides an explanation of the intersection of the Clean Buildings Act with BEPS (page 28); the key take-away being, “The Seattle Building Emissions Performance Standard covers the same buildings and builds on the State’s energy efficiency requirements, with an emissions overlay to ensure Seattle buildings are both resource efficient and climate pollution free.” If you need help with compliance and planning, keep in mind that, among other free resources, the Smart Buildings Center maintains a Help Desk that provides consultation, resources and training.
Plan ahead. The City has made clear, in multiple documents (City’s BEPS webpage), that the initial targets are just a pathway to carbon neutral by 2050. Do not be surprised when these are ratcheted up. Put another way, it would be short sighted to see the current targets as the ultimate goal, so plan ahead. View the GHGI Targets as a first step, and develop a longer term plan, especially if you have ESG goals.
Participate in the process. The City has provided various opportunities for stakeholders to learn more and participate in the process. Here are two options:
Seattle’s Building Emissions Performance Standard: What You Need to Know Now (free webinar)
BEPS has a strong focus on equity, and the City is looking for input regarding how to design a program to assist under-resourced buildings with upgrades (take the survey)
Leverage leases as a key risk management tool
Building Performance Standards are a new type of regulatory tool that (1) lacks precedent and (2) will require owners and tenants to work together in ways they never have before. This is because, among other reasons, owners are now responsible for understanding and managing tenant energy use - something that leases have never accounted for.
From a sustainability and ESG standpoint, the world of real estate has significantly changed over the past few decades - yet leases, as the contracts that govern the landlord/tenant relationship - have not changed in those same decades.
In no other context would we use severely outdated contract terms to govern a commercial relationship, particularly one as valuable as real estate. Put another way, the great majority of leases that exist today were drafted and negotiated during a time when building performance standards did not even exist; they did not contemplate the associated requirements.
It’s time to update your leases and lease templates. And while you’re at it, consider how they align with your overall ESG goals and metrics (learn more on our blog), because climate-aligned leases can be a key aspect of your overall ESG strategy, including recognition by GRESB.